The high rate of principal turnover is costing school districts dearly, particularly teachers and students in high-poverty systems, according to a new report by the School Leaders Network.

The report, "Churn: The High Cost of Principal Turnover," which was released last month, examines the financial toll of principal turnover and calculates what students and districts lose when effective principals leave schools.

A quarter of the country's principals quit their schools each year, according to the report, and nearly 50 percent leave in their third year.

And that churn happens after a district typically has spent an estimated $75,000 on each leader to prepare, hire, and place that person on the job, the report found.

A 10 percent reduction in principal turnover in high-poverty districts—where 27 percent of principals leave their schools annually—along with an increase in principal effectiveness, could add $30,024.07 to a student's lifetime earning potential, according to the report. Without that frequent turnover, students in a 72,000-student district would have contributed $469 million in taxable earnings to local tax collectors, according to the report.

The School Leaders Network came up with the lost earnings estimate by using a calculation that took into account the annual income for people of color from the Bureau of Labor Statistics and extrapolating their lifetime earnings. It also drew on the work of researchers, including those who had examined the impact of increasing principal effectiveness in high-poverty schools.

"Our hope is that people recognize that this is not an issue we can ignore—that there are very real consequences," said Mariah Cone, vice president of knowledge at the School Leaders Network and the report's author.

The report is based on a literature review of principal studies, survey data, along with analyses of statistics from the Bureau of Economic Analysis, Bureau of Labor Statistics, National Center for Education Statistics, and the U.S Census.

Similar work has been done to assess the financial impact of teacher turnover, but not principals, she said.

Principals set the tone and climate in the schools they lead. Strong leaders contribute up to 25 percent of the school factors that influence a student's academic performance, according to the report. And teachers often make decisions about where to teach and how long they stay at a particular school in a large part based on its leadership.

Students' scores tend to decrease the year immediately following a vacancy, and it takes about five years for a principal to really put his or her vision in place at a school and significantly change the school's performance, Cone said.

According to the report, same-school principal turnover rates are highest in North Carolina, Rhode Island, Alaska, California, Oregon, New Mexico, Delaware, Nevada and Idaho. In those states, principals stay at the same school an average of 2.7 to 3.5 years.

This "churn" is particularly acute in high-poverty districts. Students in high-poverty school districts are unlikely to have the same principal throughout their enrollment at a school, according to Cone's report.

In more affluent, suburban districts, turnover is around 20 percent. Charters average a 29 percent departure rate. Reducing the turnover in high-poverty schools to the churn rates in suburban schools could save those poor districts $163 million annually, she wrote.

Cone said that KIPP also invests about $150,000 per principal—far more than public school districts, particularly high-poverty ones, can afford to spend.

A number of factors drive the principal exodus, including workload, costs—personal, psychological and financial—lack of autonomy, and isolation. Another key reason leaders leave is the lack of support and professional development that principals receive once on the job. Some districts provide two years of mentoring or coaching, but after that, many principals are left to sink or swim largely on their own.

"School districts would be considered incompetent if they did not provide teachers with ongoing learning opportunities once they completed teacher certification," she wrote. "Yet this is precisely the reality, as most principals are left on their own to find relevant and personalized ongoing learning."

Added to that is a "bubble of isolation," where principals can neither go to teachers (their subordinates) or supervisors (their bosses) to discuss issues and challenges related to the job, Cone said.

"Where do they go with these really deep questions of practice?" she said. "They have to solve it themselves."

She said there needed to be a rebalancing in how funds are spent on the principalship. Of the $1 billion in federal dollars given to school districts annually to support training programs, only 9 percent goes toward supporting principals, she wrote. The rest goes toward teachers.

"It's not that we need to underfund or defund principal preparation programs," she said, adding that there was a mismatch in how financial resources are distributed.

"You get $75,000 on the one end before the principal becomes a principal, and once the principal becomes a principal it's pennies on the dollar....There needs to be a real attention to continuous investment in the principalship."

Cone's proposed solutions are similar to what others recent reports have recommended. (See, for example, the George W. Bush Foundation and New Leaders' "Great Principals at Scale" report.)

Create opportunities for one-to-one coaching that extend beyond the first two years on the job; and

Revise the central office role of the district's principal supervisors.

Policymakers and individual districts are already moving along with some of those initiatives. The Council of Chief State School Officers and the National Policy Board for Educational Administration, for example, are currently writing the first-ever standards for principal supervisors. Many districts are also creating—or expanding—professional learning communities for their principals, along with peer-to-peer counseling and mentoring.

Cone said the research for the report was funded in-house, without external partners. A list of the group's external funders can be found here.

CORRECTION: An earlier version of this post reported the wrong retention rate for principals at KIPP schools. It also used an incorrect figure to describe how much federal money for school districts is used for principal training.

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